Apple Watch not pairing with IPhone.

This is really bizzare. I haven't used my Apple Watch in about a year and I decided to use it again. However, it wouldn't connect to my phone so I decided to reset the watch to factory settings. Now when i try to pair, I get really wierd effects.

When I use the camera feature to pair, it says I need to have a software update, yet it says my Watch is already updated, which doesn't make sense and so won't allow me to continue:

Next, when I try to pair manually, this happens as soon as I select the Watch:

I have restarted both my phone and Watch and nothing is working. My phone is updated to IOS 10+

Help!